The CBO released a study recently on the change of income distribution in the US between 1979 and 2007. Average incomes have risen by 62%. However, only the top 20% of income earners have seen that kind of income increase. Incomes for the bottom 20% have only gone up by 18%.
Income is becoming increasingly concentrated at the top, with top 1% doubling their share of overall income. It should be noted that the chart shows income after taxes and after welfare transfers.
What I wanted to see is what would incomes look like if instead all incomes rose by the average 62%. The CBO breaks income groups into quintiles. If we define those in the first and second quintile as poor, the third and fourth quintile as middle-class, and the fifth quintile as rich, we find this:
Situation as of 2007
Poor: less than $30,000
Middle: between $30,000 and $61,000
Rich: more than $61,000
Hypothetical 2007
Poor: less than $37,000
Middle: between $37,000 and $67,000
Rich: more than $67,000
If the level of income concentration had remained the same since 1979, roughly 80% of income earners would be making around $7,000 more each year.
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